From cotton to coltan, materials tainted by slavery and child labor flow through opaque, fragmented supply chains to end up, often without our knowledge, in the products we buy. It's a global reality that has received little mainstream scrutiny, but a new California law may herald a changing national attitude towards holding corporations accountable for the materials they use.

This week, Governor Arnold Schwarzenegger signed California's Supply Chain Transparency Act. The law, sponsored by state Senator Darrell Steinberg (D-Sacramento), requires companies operating in California and making more than $100 million in annual revenue to publicly report on voluntary efforts to monitor their direct supply chains in order to eliminate exploitation.

The use of slave and child labor is common in the mines and fields where resources are obtained as well as in the factories where they’re manufactured. The International Labor Organization reports a staggering 200 million children at work worldwide, while global estimates of people in slavery are as high as 27 million. But in a market that rewards the companies selling the cheapest goods, reform has been sluggish at best.

Corporations that benefit from underpaid or slave labor, including that of children, have also long enjoyed the benefits of plausible deniability—essentially, shoulder-shrugging—when human rights violations occur on their watch. When child labor is discovered in sweatshops at the lowest rung of production at companies like Nike, Apple, Firestone, or Abercrombie, those suppliers are reprimanded and sometimes put out of business. But the companies themselves, which contract for the mining, sewing, and harvesting involved in getting their products on the shelves, often pay little or no penalty.

There are a staggering 200 million
children at work worldwide, and 27 million people in slavery.

California's new legislation could change that. Well, sort of.

While some corporations have voluntarily published official statements on Corporate Social Responsibility (CSR) for years, this law requires all businesses with substantial profits to use a fraction of that money to report on strategies for tracking and responding to slavery in the work they commission. If they don’t have a strategy, they must report that too. And that doesn’t look good.

Compliance also requires answering basic questions about CSR policies, including whether or not the company ensures that its suppliers follow laws regarding slavery and trains employees to recognize and deal with exploitative labor. Most importantly, a CSR policy must state whether it uses third-party verification—in other words, does it allow outside auditors to conduct independent assessments and unannounced check-ins with suppliers? Think of it like a secret shopper for human rights.

Companies such as Target, Wal-Mart, and Disney have published CSR initiatives for a long time, but it’s hard to say how effective or transparent the internal assessments of any company’s efforts are. Internal reporting is susceptible to corporate greenwashing, whereby businesses promote socially responsible positions that are often sugared with self-praise, but weak when it comes to real action. Allowing outside auditors to inspect what’s happening on the ground and publishing independent analyses is a first step of good faith from companies to consumers.

Sponsors of the law chose to pioneer this effort in California because its robust economy—the 10th largest in the world—makes it fertile territory for pushing the limits of corporate accountability. Hundreds of billions of dollars in imports pour into the state each year, and it is responsible for $1.8 trillion of total U.S. economic activity. Anyone who wants to continue doing business in California (read: any major player in the U.S. economy) will have to investigate their own supply chains—and make their efforts transparent for consumers all over the world—by January 2012. An estimated 3,200 companies will be affected.

One test of the law’s potency is how strongly corporations pushed to kill it, and the one thing corporate lobbies were (bewilderingly) transparent about was protecting their interests. "These are the kinds of issues that create great consternation for my companies, which spend a lot of time worrying about their image," Dorothy Rodrock of the California Manufacturers and Technology Association told the Los Angeles Times. Additionally the California Chamber of Commerce expressed concern about the fact that retailers and manufacturers doing little or nothing to eradicate slavery from their supply chains would get bad press.

Well, yes.

Corporate interest groups fretted about the feasibility of monitoring entire supply chains, but the law only applies to companies with adequate resources to pull it off. It may even help smaller businesses that have prioritized fair trade compete with multinationals that have not.

The California law comes on the heels of the expansive Dodd-Frank Financial Reform Act, which included a provision requiring electronics companies to publicize whether their products are sourced from conflict-ridden regions in the Democratic Republic of the Congo, and, if so, how they intend to protect human rights in those supply chains.

Such policies are not intended to punish businesses but rather to steer the whole economic constellation towards a more responsible future, argues Lisette Arsuaga of the L.A.-based Coalition to Abolish Slavery and Trafficking (CAST), a co-sponsor of the California law. It's the most basic principle of supply and demand: Suppliers produce what the market demands, and the market is changing.

More consumers are asking questions about the origins of the products they buy—and those at the helm of global production are beginning to have to come up with answers. The purpose of this move by California, then, is to make sure those answers are based on transparent information, not misdirection or corporate greenwashing.

Just as environmental consciousness and the burgeoning organic food movement have given way to growing awareness of the impact that each of us has on the world we share, a cultural shift towards economic justice is leading many to confront their "human footprint": the impact that behavior–especially consumer behavior–has on others.

Ultimately, laws like these are only tools. Without consumer action, there's zero consequence for continuing to use the worst forms of exploitative labor: Enforcement is left to the market itself. Helping people access and make sense of the information that the California law makes public will be critical in preventing it from atrophying into thousands of glossy but toothless CSR policies, and making it a tool of real change instead.

Interested?

:Thousands of grassroots, African-led efforts are building locally
rooted alternatives to the chemical agriculture promoted by the Gates
Foundation and Monsanto.

:Video: GLEE-inspired activism for a democracy run by human beings, not corporations.